Exploring Office Submarkets in Mexico with Lower Availability Rates

The low availability is attributed to the limited delivery of new spaces and high occupancy demand, creating significant implications for the competitiveness of the commercial real estate market.

The shortage of available spaces has set the tone in six office submarkets that stand out for their low availability rate, according to the latest sector report. With over 20 submarkets under monitoring, attention is focused on:

5 de Febrero: 6.7% availability (Querétaro).

López Mateos: 7.8% (Guadalajara).

San Jerónimo-Obispado: 11.5% (Monterrey).

Periférico Sur: 12.4% (Mexico City).

Plaza del Sol: 12.9% (Guadalajara).

Valle Oriente: 14.8% (Monterrey).

This phenomenon is not limited to a particular region, as these submarkets with low availability levels are evenly distributed throughout the country, challenging the trend of quicker recovery in certain areas, as evidenced by Monterrey's strong performance in terms of prices during the second half of 2023.

The low availability rate, a key measure reflecting the proportion of occupied spaces compared to available and newly delivered ones, reveals a dynamic market with a strong demand for occupancy. Factors such as the reduced delivery of new spaces in the last year have contributed significantly to this phenomenon. During 2023, the availability rate decreased considerably, as few new spaces were delivered, while occupancy experienced a substantial increase, doubling the size of the new deliveries.

Comparing this phenomenon with the year 2022, there is an investment in market dynamics. During that period, more deliveries were made, and more spaces were occupied, indicating a shift in supply and demand. The current trend of low availability highlights the need for increased investment and development of new spaces to balance supply and demand in the office market.

The implications of this low availability rate are significant for players in the commercial real estate market. Competition intensifies among companies seeking suitable spaces, which could translate into increases in rental prices and greater selectivity by tenants. Additionally, low availability can create opportunities for the development of new real estate projects, especially in areas with high demand and limited supply.

In conclusion, the office submarkets in Mexico with the lowest availability rates present a challenging yet opportunity-filled scenario for investors and real estate developers. The key will be the market's ability to adapt to this dynamic, driving the development of new spaces and ensuring a healthy and sustainable competition in the sector. To learn more about this topic, visit SiiLA REsource or contact us at contacto@siila.com.mx.